World dangerously close to recession, warns WB President

Washington: World Bank President David Malpass on Thursday warned that the global economy is "dangerously close" to a recession and called for targeted support for the poor.

"The growth rate, we've lowered our 2023 growth forecast from 3 per cent to 1.9 per cent for global growth. That's dangerously close to a world recession, and that's - a world recession could happen under certain circumstances," Malpass told reporters on the sidelines of the annual meeting of the World Bank and the International Monetary Fund here.

All of the problems that people have taken note of, the inflation problem, the interest rate rises, and the cutoff of capital flows to the developing world hits the poor hard, he said, adding that's a huge challenge for the bank.

"We are focused on helping people get ahead in developing countries, and right now there have been reversals. The countries, of course, are all different. So, we'll have a discussion today of certain countries. So, it's not monolithic at all," Malpass said.

Some countries, he said, have already been raising their interest rates and may be reaching a point where they don't have to keep raising. Some countries have done one kind of subsidy versus another kind of subsidy.

"And so, fiscal policies are different throughout. And also, very importantly, some countries are commodity producers and some are commodity buyers. And so, we've, in general, advocated for countries that when--as they address the crisis that they try to have targeted responses. That means support for the poor; that means interventions that are targeted; and also, there's an exit strategy, they are temporary,

Malpass said.